SMALL-SCALE CROSS-BORDER TRADE SURVEY E X E C U T I V E S U M M A R Y EXECUTIVE SUMMARY The Trade Facilitation West Africa (TFWA) program is an initiative driven by multiple development partners1 to improve trade facilitation in West Africa. Its objective is to improve the free and efficient movement of goods in the region and internationally, by reducing the time and cost of trade borne by the private sector in West Africa, and by strengthening regional trading networks’ ability to take advantage of these improvements. Started in September 2018, the five-year program is managed by the World Bank Group and the German Development Cooperation Agency, the program’s 3000 implementing partners, with strategic oversight and guidance provided by a steering committee chaired by the Economic Community of West African Interviews States (ECOWAS) Commission and supported by the West African Economic and Monetary Union (UEMOA) Commission as deputy chair. Key areas for support under the program include the following: (i) to ensure that trade facilitation measures are improved and more efficiently implemented; (ii) to 204 improve Key Informant the movement of goods along selected corridors; and (iii) to reduce Interviews the barriers for small-scale traders, with an emphasis on improving conditions 48 Discussions for women traders. Focus Group With the aim of expanding the base of evidence required to inform the design of its program activities, the World Bank Group commissioned a field survey on small-scale cross-border traders (SSCBTs), including women traders, along the six TFWA Traders are priority corridors, namely: Abidjan– Dakar Bamako Niamey Ouagadougou (Côte d’Ivoire–Burkina Ouagadougou Kano Faso), Female Mostly male Ouagadougou–Tema (Burkina 60% Faso–Ghana), 40% Lagos–Kano–Niamey Cotonou (Nigeria–Niger), Cotonou–Niamey (Benin– Lagos Lomé Abidjan Tema Niger), Dakar–Bamako (Senegal–Mali), and Distance traveled Lomé-Ouagadougou (Togo–Burkina Faso). 228–400 km average Means of transportation 2-track transport time common most At the 1 this brochure was produced, the European Union, the U.S. Agency for International Development, the Government of the Kingdom of the Netherlands, and Germany have provided financial contributions. 2 TFWA PROGRAM SMALL-SCALE CROSS-BORDER TRADE SURVEY Women 3000 3000 The survey aimed to explore: (i) the demographics of small-scale traders and the patterns of their trade along target corridors; (ii) Interviews Interviews challenges faced by traders in their activities at border crossings, including behavioural constraints and and gender-specific constraints; and (iii) the institutional framework and support 204 Key Informant Interviews 204 Key Informant Interviews that exists for small-scale border operators. A total of 2,999 quantitative interviews with traders, porters, intermediaries, 48 Focus Group Discussions 48 3000 Focus Group Discussions and border officials; 204 key informant interviews; and 48 focus group discussions (FGDs) were completed. Interviews SSCBTs are relatively young, both male (60%) and female Traders are Traders are 204 (40%), that are KeyandInformant Interviews generally poorly educated. They run businesses often unregistered and/or of limited profitability, and Mostly male 60 Female 40% 48 % travelling Focus long distances along regional corridors to trade in raw Group Mostly male Female 60% Discussions agricultural 40% goods, processed food items, consumer durables and textiles, among others – some gender-based differences Distance traveled exist. Survey results suggest that, on average, between one-third 228–400 km average Distance traveledand one-half of traders are aged 34 or less, and up to 40%+ of 228–400 km average them have informal/no schooling. They are primarily male (60%), Means of transportation Traders are have a business formalization rate ranging between 22-44%, and 2-track transport most common Means of transportationin 40%Femaleof the cases earn less than $99/month. They travel on male Mostly most 2-track transport common 60% average between40% 228-400 km along regional corridors, primarily using 2-track transport (motorbikes, cars, vans, buses etc.), and in most cases engage Women in trader-to-trader sales. travel shorter distances on average Distance traveled 293 km vs 470 km Women 228–400 travel km average shorter distances on average Women traders, albeit a minority, can represent up to 40% of the total, with the 293 km vs 470 km notable exception of the Lagos-Kano-Niamey corridor where they are severely Means of transportation under-represented probably due to cultural and security reasons, among 2-track transport mostThey common Officials/PITs others). are generally present in all product categories yet only dominate in food trade and engage in retail trade to the same extent that men do. On the Officials/PITs Nearly 100% other hand, they are more likely to run unregistered businesses (with average well-educated registration rate at 21.6%, compared to men’s 42.4%), NearlyWomen 100% travel shorter distances on average attended and generally travel shorter average distances (293 km secondary school or higher well-educated 293 km vs 470 km attended secondary school or higher as opposed to men’s 470 km). Male Female 85% 15% (Officials only - no female PITs) Male Female 85% 15% Officials/PITs TFWA (Officials only PROGRAM - no female PITs) SMALL-SCALE CROSS-BORDER TRADE SURVEY Experienced 3 60% 60 % 40% 40 % Traders are Women male shorter Mostly travel distances on average Female traveled Distance traveled Distance 60% 293 km % 470 km 40vs km average 228–400 km 228–400 average Distance traveled of transportation Means of Means transportation 228–400 km average 2-track transport most common 2-track transport most common Officials/PITs Border officials, along with porters, intermediaries, and transporters (PITs), play an important role in regional trade Nearly 100% and exhibit different demographics from traders. Survey Means of transportation 2-track transport most common Women well-educated results indicate that both categories of officials and Women PITs are shorterdistances travelshorter travel distances on average on average attended secondary school or higher male-dominated, with women accounting for only 10-15% of the former on average and completely absent among the 293 293 km vs km latter. vs 470 470 km km WomenMale Female Officials and PITs are also generally (much) better educated travel shorter 85distances % 15average on % than traders, having completed secondary education or higher 293 (Officials only - km vs 470 no female PITs) km in most cases, and are typically quite experienced having been in Officials/PITs Officials/PITs their jobs for 10+ years on average – turn-over rates for officials Experienced vary across corridors, and can be relatively high in some Nearly cases. 100% Nearly 100% 10 years Officials/PITs + Since traders do not always cross borders for trading purposes, well-educated but rather travel along part of a corridor to then relay theirwell-educated goods attended secondary school or higher Nearly 100% attended secondary school or higher to other traders who will continue the journey in the neighbouring country, it well-educated would appear that the role of PITs in facilitating such exchanges of good can Male Female 40%+ attended secondary school be of traders quite or higher important, and deserves greater attention. Male 85% Female 15% on some corridors rate 85% 15% (Officials only - no female PITs) every facility “(very) inadequate” All survey (Officials respondents generally expressed concerns about the current only - no female PITs) status Male Female 85% 15% of border- and market- infrastructure as well as about overall safety, and (Officials only - no female PITs) complained about complexity of clearance requirements and procedures Experienced Experienced – on these, traders showed extremely limited knowledge. Among traders, up + to + years 10 years 10 Very low Experienced 40%+ awareness judged every single facility found at the surveyed border- or market 10 years on trade rules and provisions + site as ‘’inadequate’’ or ‘’very inadequate’’, with women being slightly more 90 + % negative traders haveon average, and generally more concerned with 40%+ of of traders limited/facilities no knowledge associated with safety such as lighting, roads, 40%+ traders pedestrian lanes and rain cover, as well as (separate) toilets. on some corridors rate on some corridors rate 40%+ PITsof traders every facility “(very) inadequate” were also critical of infrastructure, albeit generally less every facility “(very) inadequate” on some corridors rate negative than traders. Corruption every facility “(very) inadequate” 40% of traders Similarly, respondents’ exposed perceptions about clearance requirements & procedures were also generally negative, with formal traders being more to bribery along most corridors low awareness Very low Very awareness critical (presumably because they are more likely to actually on trade rules and provisions on trade rules and provisions Very low awareness 90% undergo formalities) but no clear product- or gender-based on trade rules and provisions trend emerged. Awareness on trade-related rules and provisions 90 + %+ traders have traders have 90 + % traders have (including regional provisions such as ECOWAS CET limited/ no knowledge and ETLS) limited/ was extraordinarily low among traders: up to 90%+ declared to no knowledge limited/ no knowledge have ‘’limited’’ or ‘’no knowledge’’ on them. Access to finance Respondents is a major constraint in all six corridors also repeatedly highlighted Corruption Corruption Corruption the lack of transparency in border clearance, and reported 40% 40 % of traders exposed of traders exposed relatively high incidence of abuse. Corruption was 40% of traders exposed highlighted as a major issue by traders and PITs in both to bribery along most corridors to bribery along most corridors to bribery along most corridors quantitative interviews and FGDs, and at least 40% of traders declared that they had been exposed to bribery along most of the surveyed corridors. Rate of issuance of formal receipts is apparently quite low (26-47% on average), and the issue seem to be relatively well acknowledged by the various actors with only one-third of surveyed officials explicitly condemning it. Access to finance Access to finance Access finance toconstraint is a major Increase border is a major constraint major constraint is a transparency 4 TFWA PROGRAM SMALL-SCALE CROSS-BORDER TRADE SURVEY Very low awareness on trade rules and provisions 90%+ traders have limited/ no knowledge In contrast – at first glance – the scale of harassment, sexual or otherwise, was minimal or denied in the quantitative interviews, especially by women. Corruption But those phenomena did emerge as major concerns during FGDs and qualitative 40 % of traders discussions. Part of such discrepancy can be attributed to respondents’ exposed being to bribery along likely uncomfortable discussing sensitive issues on a one-on-one, but more most corridors forthcoming in some group settings. Access to finance is a major constraint for respondents: personal savings and informal networks are the most common channels to access financing for traders, including women. Formal financial products and services are seen as more challenging to adopt. Personal savings are the primary Access to finance form of finance for both male and female traders along all is a major constraint surveyed corridors – they represent about 33 to 40% of total financing on average, and can reach much higher values along the Dakar- Bamako and Lagos-Kano-Niamey corridors. Borrowing from family members, friends, and neighbours is also common among traders, while formal channels such as commercial banks and micro-finance institutions are typically used much less. There are some exceptions: for instance, up to 18% of male traders use commercial banks to finance their activities along Lomé-Ouagadougou, while 24% of women turn to microfinance institutions in Cotonou-Niamey. In general, microfinance seems to be more popular among women, with their use peaking between 12 and 24% along four out of six corridors. Low financial Increase border literacy levels, complex documentation, and stringent loan requirements (for transparency example, in terms of collateral, interest rates, and/or repayment terms) are cited by traders as major challenges preventing them from extensively using formal financing channels. Simplify procedures and requirements Increase number of female staff at the border Enhance border security TFWA PROGRAM SMALL-SCALE CROSS-BORDER TRADE SURVEY 5 to bribery along most corridors Access to finance is a major constraint Based on survey findings, a number of interventions have been designed for support bv TFWA to respond to identified constraints. They include following, among others: Access to finance is a major constraint • Put in place measures that can increase transparency at the border (for example, by clearly displaying regulations and procedures) and strengthen capacity and awareness levels among border and market users (for example, through training, dissemination campaigns, and other awareness-raising Increase border efforts). The establishment of help desks (physical or virtual), mandated to inform traders of rules and regulations and assist transparency them with clearance procedures, should also be considered in close coordination with community service organizations and relevant associations, including those representing women traders. Easy-to-follow guides designed for mobile phones could also be considered. Although the details will differ between corridors and borders, a common overall approach can be pursued for the adoption of theseIncrease border transparency measures, for efficiency reasons, but also to ensure that, for instance, traders crossing more than one border will be familiar with the approach. In Simplify procedures designing a program, careful consideration needs to be given to the most and requirements appropriate location of delivery (that is, border versus non-border), given the extensive movement of the traders far beyond the border areas. • Put in place measures that can help simplify, Increase number of streamline, and/or decentralize existing procedures female staff and requirements, as well as create incentives for more at the border systematic application of existing regional provisions, such as the Economic Community of West African States Simplify procedures Trade Liberalization Scheme. Among others, attention could be given to options for a simplified regime for and requirements small-scale traders, as a measure to reduce documentary Enhancerequirements on smaller consignments, streamline procedures, andIncrease reducenumber of border security the time and cost of trade. In this sense, lessons could be imported from staff female elsewhere, such as from Southern Africa and East Africa. at the border • In terms of sequencing actions, prior to the process of simplification it would be useful to document what the procedures and requirements are at each border, where they are defined, who is responsible for their implementation, what documents traders need to carry and so on. As well as making the simplification of procedures a smoother process, this Enhance action also helps to identify areas where transparency most needs to be border security encouraged (e.g. by removing discretion from officials implementing rules). Measures to increase transparency are best implemented after procedures and requirements are simplified. Another benefit of documenting existing rules and practices is that this allows comparisons between borders and can encourage more systematic change in procedures and requirements across the region. 6 TFWA PROGRAM SMALL-SCALE CROSS-BORDER TRADE SURVEY Increase border transparency • Put in place measures to improve behavior at the survey sites and Increase border relationships between traders, PITs, and border officials, such as joint transparency workshops, grassroots campaigns, town hall meetings, and ad-hoc trainings, including on the gender ramifications of trade facilitation and challenges abuse procedures Simplify affecting female traders. Systems that allow traders and PITs to report and requirements in safe ways could be devised. The participation of trusted organizations, especially community service organizations—including those representing women—should be encouraged. • Consider increasing the number of female staff in the ranks border IncreaseIncrease number of Simplify procedures and of border agencies. Promoting staff diversity and enhancing requirements among border officials is urgent and crucial. gender-sensitivity transparency female staff at the border • In response to the concerns about infrastructure, implement small-scale Increase number of infrastructural development interventions, such as the introduction of female staff surveillance at the border cameras, installation of solar-powered lighting facilities, systems to report problems (and ensure rapid response), as well as designation of night patrol guards. These actions could be discussed for further prioritization with the stakeholders. Separately, the issue of the Enhance conditions of the markets and road-related and border security Enhance similar infrastructure could be forwarded to other border security Simplify procedures donor-funded programs with heavy emphasis on physical infrastructure development. and requirements • Pay greater attention to the key features of PITs. This is a broader lesson for the main survey and TFWA activities more generally, to understand the role that PITs play at survey locations and the challenges they face, which Increase number of the program could try to address. female staff • Address the challenges identified in the survey results access to markets, at the border information, and finance. Financial constraints were cited as the biggest concern for traders at all the sites. Given that access to finance requires a comprehensive approach, TFWA will need to work with other ongoing initiatives to improve financial inclusion and access to finance in the region, to fill existing gaps. Support towards increased financial awareness for traders will be contemplated, and innovative solutions -including through Enhance state-of-the-art technology- will be explored to enhance their bankability. • border security Systematic data collection on SSCBT. Detailed, relevant and organised data and information on SSCBT trade in West Africa are not available; establishing a data collection system on SSCBT should be considered under TFWA. Lack of data represents an obstacle to efficient and effective policy making on a phenomenon which affects large sections of the region’s poorest populations, and one which potentially has a significant role to play in the region’s future development. Setting up a data collection system on SSCBT, ideally in a common effort across West Africa, could draw on lessons from countries that are regularly collecting such data, and where the information has influenced policy discussions at the local and national level. TFWA PROGRAM SMALL-SCALE CROSS-BORDER TRADE SURVEY 7 The Trade Facilitation West Africa (TFWA) Program is a five-year, multi-partner initiative that aims to promote trade facilitation and regional integration in West Africa. The program strives to reduce the time and cost of regional trade by improving the movement of goods along six selected corridors including for small-scale cross-border traders (SSCBTs), especially women. To inform the design of TFWA interventions addressing SSCBT constraints, including gender-based ones, a large-scale regional field survey was conducted across nine West African countries – its findings are detailed in this report.